UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998

                                       OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
             FOR THE TRANSITION PERIOD FROM ......... TO ..........
                          COMMISSION FILE NUMBER 1-7584


                   TRANSCONTINENTAL GAS PIPE LINE CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


          DELAWARE                                             74-1079400
  (STATE OR OTHER JURISDICTION OF                           (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)                          IDENTIFICATION NO.)

  2800 POST OAK BOULEVARD
       P. O. BOX 1396
       HOUSTON, TEXAS                                           77251
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (713) 215-2000

                                      NONE
              (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                          IF CHANGED SINCE LAST REPORT)


         INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE  ACT OF
1934  DURING  THE  PRECEDING  12 MONTHS  (OR FOR SUCH  SHORTER  PERIOD  THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),  AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
                                              -   -
THE  NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE, OUTSTANDING AS
OF MARCH 31, 1998 WAS 100.

REGISTRANT  MEETS THE CONDITIONS SET FORTH IN GENERAL  INSTRUCTIONS  H(1)(a) AND
(b) OF FORM  10-Q AND IS  THEREFORE  FILING  THIS  FORM  10-Q  WITH THE  REDUCED
DISCLOSURE FORMAT.


<PAGE>







                      PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

         COMPANY OR GROUP OF COMPANIES FOR WHICH REPORT IS FILED:

TRANSCONTINENTAL GAS PIPE LINE CORPORATION AND SUBSIDIARIES (TRANSCO)


     The accompanying  interim condensed  consolidated  financial  statements of
Transco do not include all notes in annual  financial  statements  and therefore
should be read in conjunction  with the  consolidated  financial  statements and
notes  thereto in Transco's  1997 Annual Report on Form 10-K.  The  accompanying
unaudited financial statements have not been audited by independent auditors but
include all adjustments  both normal  recurring and others which, in the opinion
of Transco's management,  are necessary to present fairly its financial position
at March 31, 1998, and results of operations and cash flows for the three months
ended March 31, 1998 and 1997.

     Certain matters discussed in this report, excluding historical information,
include   forward-looking    statements.    Although   Transco   believes   such
forward-looking statements are based on reasonable assumptions, no assurance can
be given that every  objective  will be achieved.  Such  statements  are made in
reliance on the "safe harbor" protections  provided under the Private Securities
Reform  Act of 1995.  Additional  information  about  issues  that could lead to
material  changes in performance is contained in Transco's 1997 Annual Report on
Form 10-K.





<PAGE>





                   TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEET
                             (Thousands of Dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                                   March 31,              December 31,
                                                                                      1998                    1997
                                                                                -----------------       -----------------
<S>                                                                                  <C>                     <C>

         ASSETS
Current Assets:
     Cash                                                                            $     1,429             $     1,321
     Receivables:
         Affiliates                                                                        1,035                     868
         Others                                                                           25,880                  27,493
     Advances to affiliates                                                              432,485                 281,454
     Transportation and exchange gas receivables:
         Affiliates                                                                       25,787                  23,567
         Others                                                                           64,789                  66,825
     Inventories                                                                          67,593                  84,240
     Deferred income tax asset                                                            71,261                  90,672
     Other                                                                                21,052                  17,570
                                                                                -----------------       -----------------
         Total current assets                                                            711,311                 594,010
                                                                                -----------------       -----------------

Investments                                                                                6,896                   7,072
                                                                                -----------------       -----------------

Property, Plant and Equipment:
     Natural gas transmission plant                                                    4,014,777               3,977,620
     Less-Accumulated depreciation and amortization                                      514,346                 477,667
                                                                                -----------------       -----------------
         Total property, plant and equipment, net                                      3,500,431               3,499,953
                                                                                -----------------       -----------------

Other Assets                                                                             180,587                 166,628
                                                                                -----------------       -----------------

                                                                                     $ 4,399,225             $ 4,267,663
                                                                                =================       =================


     The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

</TABLE>







<PAGE>





                   TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEET
                             (Thousands of Dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                                   March 31,            December 31,
                                                                                     1998                   1997
                                                                                ----------------       ----------------
   <S>                                                                             <C>                     <C>

            LIABILITIES AND STOCKHOLDER'S EQUITY
   Current Liabilities:
        Payables:
            Affiliates                                                             $     44,180            $    44,749
            Others                                                                       58,256                 90,486
        Transportation and exchange gas payables:
            Affiliates                                                                      381                    374
            Others                                                                       16,000                 18,033
        Accrued liabilities                                                              98,650                130,594
        Reserve for rate refunds                                                        237,229                204,554
                                                                                ----------------       ----------------
            Total current liabilities                                                   454,696                488,790
                                                                                ----------------       ----------------

   Long-Term Debt                                                                       976,071                837,832
                                                                                ----------------       ----------------
   Other Long-Term Liabilities:
        Deferred income taxes                                                           842,427                843,108
        Other                                                                           164,094                171,586
                                                                                ----------------       ----------------
            Total other long-term liabilities                                         1,006,521              1,014,694
                                                                                ----------------       ----------------
   Commitments and contingencies (Note 3)

   Common Stockholder's Equity:
        Common stock $1.00 par value:
            100 shares authorized, issued and outstanding                                     -                      -
        Premium on capital stock and other paid-in capital                            1,652,430              1,652,430
        Retained earnings                                                               309,507                273,917
                                                                                ----------------       ----------------
            Total common stockholder's equity                                         1,961,937              1,926,347
                                                                                ----------------       ----------------

                                                                                   $  4,399,225            $ 4,267,663
                                                                                ================       ================


       The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

</TABLE>


<PAGE>




                   TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                             (Thousands of Dollars)
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                       For the Three                For the Three
                                                                       Months Ended                 Months Ended
                                                                      March 31, 1998               March 31, 1997
                                                                    --------------------         --------------------
<S>                                                                           <C>                          <C>
Operating Revenues:
   Natural gas sales                                                          $ 132,720                    $ 159,509
   Natural gas transportation                                                   164,869                      157,517
   Natural gas storage                                                           38,132                       36,591
   Other                                                                          3,650                          897
                                                                    --------------------         --------------------
        Total operating revenues                                                339,371                      354,514
                                                                    --------------------         --------------------

Operating Costs and Expenses:
   Cost of natural gas sales                                                    132,720                      159,508
   Cost of natural gas transportation                                            10,194                       10,813
   Operation and maintenance                                                     44,394                       43,640
   Administrative and general                                                    29,993                       31,739
   Depreciation and amortization                                                 40,627                       38,794
   Taxes - other than income taxes                                                9,073                        9,264
   Other                                                                            415                          592
                                                                    --------------------         --------------------
        Total operating costs and expenses                                      267,416                      294,350
                                                                    --------------------         --------------------

Operating Income                                                                 71,955                       60,164
                                                                    --------------------         --------------------

Other (Income) and Other Deductions:
   Interest expense                                                              22,605                       17,190
   Interest income  - affiliates                                                 (6,598)                      (1,130)
                    - other                                                         (53)                           -
   Allowance for equity and borrowed funds used during
     construction (AFUDC)                                                        (2,019)                      (1,800)
   Miscellaneous other deductions, net                                              639                          568
                                                                    --------------------         --------------------

        Total other deductions                                                   14,574                       14,828
                                                                    --------------------         --------------------

Income before Income Taxes                                                       57,381                       45,336

Provision for Income Taxes                                                       21,791                       17,665
                                                                    --------------------         --------------------

Net Income                                                                    $  35,590                    $  27,671
                                                                    ====================         ====================




    The  accompanying condensed notes are an integral part of these condensed consolidated financial statements.

</TABLE>


<PAGE>

                   TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                             (Thousands of Dollars)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                Three Months Ended
                                                                                                     March 31
                                                                                         ---------------------------------
                                                                                             1998                1997
                                                                                         -------------       -------------
       <S>                                                                                  <C>                 <C>
       Cash flows from operating activities:
          Net income                                                                        $  35,590           $  27,671
           Adjustments to reconcile  net income to net cash provided by (used in)
            operating activities:
              Depreciation and amortization                                                    42,147              40,627
              Deferred income taxes                                                            18,729                (115)
              Allowance for equity funds used during construction (AFUDC)                      (1,460)             (1,243)
              Changes in operating assets and liabilities:
                 Receivables                                                                    8,445              48,953
                 Receivables sold                                                              (7,000)            (16,000)
                 Transportation and exchange gas receivables                                     (184)              7,685
                 Inventories                                                                   16,647             (41,261)
                 Payables                                                                     (25,974)            (63,458)
                 Transportation and exchange gas payables                                      (2,026)               (978)
                 Accrued liabilities                                                          (31,944)              9,740
                 Reserve for rate refunds                                                      32,675              13,058
                 Other, net                                                                   (22,971)             14,848
                                                                                         -------------       -------------
                       Net cash provided by operating activities                               62,674              39,527
                                                                                         -------------       -------------

       Cash flows from financing activities:
          Additions to long-term debt                                                         298,343                   -
          Retirement of long-term debt                                                       (160,000)            (99,000)
          Debt issue costs                                                                     (2,060)                (39)
          Dividends on common stock                                                                 -                (841)
                                                                                         -------------       -------------
                       Net cash provided by (used in) financing activities                    136,283             (99,880)
                                                                                         -------------       -------------

       Cash flows from investing activities: Property, plant and equipment:
              Additions, net of equity AFUDC                                                  (42,928)            (26,141)
              Changes in accounts payable and accrued liabilities                              (6,825)             (7,479)
          Advances to affiliates, net                                                        (151,031)             95,411
          Other, net                                                                            1,935              (1,805)
                                                                                         -------------       -------------
                       Net cash provided by (used in) investing activities                   (198,849)             59,986
                                                                                         -------------       -------------

       Net increase (decrease) in cash                                                            108                (367)
       Cash at beginning of period                                                              1,321               1,774
                                                                                         -------------       -------------

       Cash at end of period                                                                $   1,429           $   1,407
                                                                                         =============       =============         

       Supplemental  disclosures of cash flow information:  Cash paid (refunded)
          during the year for:
              Interest (exclusive of amount capitalized)                                    $  15,999           $  22,957
              Income taxes paid                                                                18,859                 448
              Income tax refunds received                                                           -             (11,759)


          The  accompanying condensed notes are an integral part of these condensed consolidated financial statements.
</TABLE>




<PAGE>


                   TRANSCONTINENTAL GAS PIPE LINE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                       1. CORPORATE STRUCTURE AND CONTROL

      Transcontinental  Gas Pipe Line  Corporation  (Transco) is a  wholly-owned
subsidiary of Williams Gas Pipeline Company (WGP) (formerly Williams  Interstate
Natural Gas Systems,  Inc).  WGP is a  wholly-owned  subsidiary  of The Williams
Companies,  Inc.  (Williams).  Prior to May 1, 1997,  Transco was a wholly-owned
subsidiary of Williams.

                            2. BASIS OF PRESENTATION

      The condensed  consolidated  financial  statements include the accounts of
Transco and its majority-owned subsidiaries.  Companies in which Transco and its
subsidiaries  own 20  percent  to 50  percent  of the  voting  common  stock are
accounted for under the equity method.

      The condensed  consolidated  financial  statements have been prepared from
the books and records of Transco without audit. Certain information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles have been condensed or omitted.
These condensed  consolidated financial statements should be read in conjunction
with the  consolidated  financial  statements and the notes thereto  included in
Transco's 1997 Annual Report on Form 10-K.

      Through an agency agreement,  Williams Energy Services Company (WESCO), an
affiliate of Transco,  manages all jurisdictional merchant gas sales of Transco,
receives all margins  associated  with such  business  and, as Transco's  agent,
assumes  all market and credit risk  associated  with  Transco's  jurisdictional
merchant gas sales.  Consequently,  Transco's  merchant gas sales service has no
impact on its operating income or results of operations.

      Certain  reclassifications have been made in the 1997 financial statements
to conform to the 1998 presentation.

                    3. CONTINGENT LIABILITIES AND COMMITMENTS

      There have been no new developments from those described in Transco's 1997
Annual Report on Form 10-K other than as described below.

RATE AND REGULATORY MATTERS

      GENERAL  RATE CASE  (DOCKET NO.  RP97-71)  On  November  1, 1996,  Transco
submitted to the Federal Energy Regulatory Commission (FERC) a general rate case
filing  principally  designed to recover costs associated with increased capital
expenditures.  These increased capital  expenditures  primarily relate to system
reliability, integrity and Clean Air Act compliance.

      When stated on a comparable basis, the rates Transco placed into effect on
May 1, 1997,  represent an annual cost of service increase of approximately  $47
million  over  the  cost  of  service  underlying  the  rates  contained  in the
settlement  of Transco's  last general rate filing  (Docket No.  RP95-197).  The
rates,   which  are  subject  to  refund,   are  designed   using  the  straight
fixed-variable rate design method.

      The filing also included (1) a pro-forma  proposal to roll-in the costs of
Transco's  Leidy Line and  Southern  expansion  incremental  projects  and (2) a
pro-forma  proposal to make  interruptible  transportation  (IT) backhaul  rates
equal to the IT  forward  haul  rates.  The  pro-forma  proposals  would be made
effective prospectively only after final FERC approval.

      On November 29, 1996, the FERC issued an order accepting Transco's filing,
suspending  its  effectiveness  until May 2, 1997 and  establishing a hearing to
examine the reasonableness of Transco's  proposed rates. In addition,  the order
consolidated  Transco's  pro-forma roll-in proposal with the Phase II hearing in
Docket  No.  RP95-197,  and  directed  that the  record  in that  proceeding  be
supplemented  to the extent  necessary.  On February 3, 1997, the FERC issued an
order on rehearing of its  November  29, 1996 order which,  among other  things,
revised the effective date for the proposed rates to May 1, 1997.

      On January  20,  1998,  Transco  filed a  Stipulation  and  Agreement  for
approval by the FERC, documenting a settlement with all of the active parties in
this  proceeding.  The settlement  resolves all cost of service,  throughput and
other issues in this proceeding,  except rate of return,  capital  structure and
certain minor cost allocation and rate design issues. The issues not resolved by
the settlement are being  litigated by the parties before a FERC  Administrative
Law Judge (ALJ).

      GENERAL RATE CASE (DOCKET NO.  RP95-197) On March 24, 1998, the ALJ issued
an initial decision on the RP95-197 Phase II issues not resolved by the June 19,
1996,  and  October 9, 1996,  settlements  and on  Transco's  rolled-in  pricing
proposal filed in Docket No. RP97-71 and consolidated with the RP95-197 Phase II
hearing  issues.  As to the main  issue  addressed  in the  decision,  rolled-in
pricing,  the ALJ determined that the proponents of roll-in,  including Transco,
must satisfy the burden under  Section 5 of the Natural Gas Act and  demonstrate
that Transco's  existing  incremental  rate treatment is unjust and unreasonable
and that the proposed  rolled-in rate treatment is just and reasonable.  The ALJ
ruled that neither Transco nor any of the other roll-in proponents had satisfied
that burden and, therefore,  that Transco's existing  incremental rate treatment
must remain in effect.  The ALJ's  initial  decision is subject to review by the
FERC.

      RATE OF RETURN  CALCULATION  On August 1, 1997,  the FERC  issued an order
addressing, among other things, the authorized rate of return for Transco's 1995
rate case (Docket No.  RP95-197).  In the order, the FERC continued its practice
of utilizing a methodology for calculating  rates of return that  incorporates a
long-term growth rate component. The long-term growth rate component used by the
FERC is now a projection of U.S. gross domestic product growth rates. Generally,
calculating  rates of return utilizing a methodology  which includes a long-term
growth rate component  results in rates of return that are lower than they would
be if the long-term  growth rate component were not included in the methodology.
Transco  has  sought  rehearing  of the FERC order in an effort to have the FERC
change its rate of return  methodology  with  respect to both pending and future
rate cases.  On January  30,  1998,  the FERC  convened a public  conference  to
explore, among other things, possible modifications to the FERC's rate of return
methodology.

      ORDER 636 On November 1, 1993, Transco implemented Order 636. Prior to its
implementation of Order 636, Transco received orders from the FERC which,  among
other things, (i) required Transco to revise its throughput  projection for rate
purposes  to  reflect  a mix of  throughput  that  includes  a  higher  level of
interruptible  transportation,  (ii) accepted  Transco's  proposal for rolled-in
rate treatment of its Mobile Bay facilities and exempted  Transco from having to
reflect  Mobile Bay  transportation  volumes and related  revenues in a separate
interruptible  revenue  crediting  mechanism,  (iii) approved a Stipulation  and
Agreement  filed  with the FERC by  Transco  and its sales  customers  resolving
certain sales service issues and mooting  potential issues  regarding  Transco's
recovery of gas supply  realignment  (GSR) costs  associated with Transco's firm
sales service, and (iv) referred certain matters to the hearing in Docket No.
RP92-137.

      Transco and certain other  parties  filed appeals of certain of the FERC's
orders to the U.S.  Court of Appeals for the D.C.  Circuit (D.C.  Circuit).  On
April 14, 1998,  the D.C.  Circuit denied all of the appeals.

SUMMARY

      While no  assurances  may be  given,  Transco  does not  believe  that the
ultimate  resolution of the foregoing  matters and those  described in Transco's
1997 Annual  Report on Form 10-K,  taken as a whole and after  consideration  of
amounts  accrued,   recovery  from  customers,   insurance   coverage  or  other
indemnification  arrangements,  will  have  a  materially  adverse  effect  upon
Transco's  future  financial  position,  results  of  operations  and cash  flow
requirements.


                       4. DEBT AND FINANCING ARRANGEMENTS

LONG-TERM DEBT

      Williams and certain of its subsidiaries,  including Transco,  are parties
to a $1 billion credit  agreement  (Credit  Agreement),  under which Transco can
borrow up to $400 million.  Interest rates vary with current  market  conditions
based on the base rate of Citibank N.A., three-month  certificates of deposit of
major  United  States  money  market  banks,  federal  funds  rate or the London
Interbank  Offered  Rate.  As of March  31,  1998,  Transco  had no  outstanding
borrowings under this agreement.

      On January 16, 1998,  Transco  issued $200 million of notes that mature on
January 15,  2005,  and $100  million of notes that mature on January 15,  2008,
which pay interest at 6-1/8% and 6-1/4%,  respectively,  per annum on January 15
and July 15 of each year,  beginning July 15, 1998. The notes are not subject to
redemption  and have no sinking fund  provisions.  Proceeds  from the notes were
used for general  corporate  purposes,  including  the repayment of $160 million
borrowed under the Credit Agreement.

SHORT-TERM DEBT

      Transco is a party to two short-term  money market  facilities under which
it can  borrow up to an  aggregate  of $90  million.  Interest  rates  vary with
current market conditions based on the applicable bank's rate at the time of the
borrowings.  As of March 31, 1998,  Transco had no outstanding  borrowings under
these facilities.

SALE OF RECEIVABLES

      Transco  is a party to an  agreement  that  expires on  January  29,  1999
pursuant  to  which  Transco  can  sell to an  investor  up to $100  million  of
undivided  interests in certain of its trade receivables.  At March 31, 1998 and
December 31, 1997, interests in $93 million and $100 million,  respectively,  of
these receivables were held by the investor.



<PAGE>


ITEM 2.  MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS.

      The  following   discussion   should  be  read  in  conjunction  with  the
consolidated  financial  statements,  notes and management's  narrative analysis
contained in Items 7 and 8 of Transco's 1997 Annual Report on Form 10-K and with
the condensed  consolidated  financial  statements  and notes  contained in this
report.

                              RESULTS OF OPERATIONS

NET INCOME AND OPERATING INCOME

      Transco's  net income for the three  months ended March 31, 1998 was $35.6
million compared to net income of $27.7 million for the three months ended March
31, 1997.  Operating  income for the three months ended March 31, 1998 was $72.0
million compared to $60.2 million for the three months ended March 31, 1997. The
higher operating income of $11.8 million was primarily  attributable to revenues
from new rates placed into effect in May 1997 to recover costs  associated  with
increased capital  expenditures and new services begun in the last half of 1997.
The increase in net income was attributable to the increased  operating  income.
Net interest  expense was equal to the net interest expense for the three months
ended March 31, 1997.

OPERATING EXPENSES

      Excluding  the cost of sales and  transportation  of $143  million for the
three months ended March 31, 1998 and $170 million for the comparable  period in
1997,  Transco's  operating  expenses for the three months ended March 31, 1998,
were  approximately $0.5 million higher than the comparable period in 1997. This
nominal increase was due to higher depreciation and amortization of $1.8 million
and slightly higher operation and maintenance  expenses of $0.8 million,  partly
offset by lower  administrative and general expenses of $1.7 million. The higher
depreciation and amortization was due to recent capital expenditures included in
the general rate case in Docket No.  RP97-71 and the expansion  projects  placed
into  service in the last  quarter of 1997.  However,  the effects on  operating
income  of the  higher  depreciation  expense  were  substantially  offset  by a
corresponding increase in revenues. The higher operation and maintenance expense
was primarily due to a $1.4 million increase in underground  storage expense,  a
$0.6  million  increase  in lube oil and  odorants  expense  and a $0.6  million
increase in charges from others for the operation of certain Transco facilities,
partly  offset  by an $0.8  million  decrease  in labor  costs,  a $0.5  million
decrease in miscellaneous  contractual services,  and a $0.5 million decrease in
other storage expense.  As described below, the increase in underground  storage
expense was largely offset by an increase in underground  storage revenues.  The
lower  administrative and general expense was primarily due to a decrease in Gas
Research Institute charges that were offset by a corresponding revenue reduction
reflecting the pass through of such costs to customers.



<PAGE>


TRANSPORTATION REVENUES

      Transco's  operating revenues related to its  transportation  services for
the three  months  ended  March 31,  1998 were $165  million,  compared  to $158
million for the three  months ended March 31,  1997.  The higher  transportation
revenues were  primarily due to new rates  contained in the general rate case in
Docket  No.  RP97-71  placed  into  effect in May 1997 and the  benefits  of the
expansion projects placed into service in November 1997.

      As shown in the table below,  Transco's total  market-area  deliveries for
the three months ended March 31, 1998  increased 13.8 trillion  British  Thermal
Units  (TBtu)  (4%) when  compared  to the same  period in 1997.  The  increased
deliveries  were mainly due to 14.5 TBtu delivered  under the Sunbelt  Expansion
Project in the first quarter of 1998.  Transco's  production area deliveries for
the three months ended March 31, 1998 decreased 10.8 TBtu (18%) when compared to
the same period in 1997 as a result of milder weather conditions.

      As a result of a straight  fixed-variable (SFV) rate design,  increases or
decreases  in firm  transportation  volumes  in  comparable  facilities  have no
significant  impact  on  operating  income;   however,   because   interruptible
transportation  rates  have  components  of fixed and  variable  cost  recovery,
increases or decreases in interruptible transportation volumes do have an impact
on operating income.





                                                            Three Months
                                                           Ended March 31,
                                                      ------------------------

Transco System Deliveries (TBtu)                          1998           1997
--------------------------------
                                                      ---------       --------


Market-area deliveries:
     Long-haul transportation                             233.0          234.6
     Market-area transportation                           153.9          138.5
                                                      ---------       --------
         Total market-area deliveries                     386.9          373.1
Production-area transportation                             48.4           59.2
                                                      ---------       --------
         Total system deliveries                          435.3          432.3
                                                      =========       ========


Average Daily Transportation Volumes (TBtu)                 4.8            4.8
Average Daily Firm Reserved Capacity (TBtu)                 5.9            5.3


     Transco's facilities are divided into seven rate zones. Four are located in
the  production  area and  three  are  located  in the  market  area.  Long-haul
transportation is gas that is received in one of the  production-area  zones and
delivered in a market-area zone. Market-area  transportation is gas that is both
received and delivered within market-area zones. Production-area  transportation
is gas that is both received and delivered within production-area zones.

     See Note 3 of the Notes to Condensed  Consolidated Financial Statements for
a discussion of recent developments in Transco's rate and regulatory matters.

SALES REVENUES

     Transco makes jurisdictional  merchant gas sales to customers pursuant to a
blanket  sales  certificate  issued by the FERC,  with most of those sales being
made  through a Firm Sales (FS)  program  which  gives  customers  the option to
purchase  daily  quantities of gas from Transco at  market-responsive  prices in
exchange for a demand charge payment.

     Through an agency agreement,  WESCO manages all jurisdictional merchant gas
sales of Transco,  receives all margins  associated  with such  business and, as
Transco's  agent,  assumes all market and credit risk  associated with Transco's
jurisdictional  merchant gas sales.  Consequently,  Transco's merchant gas sales
service has no impact on its operating income or results of operations.

     Transco's  operating  revenues  for the three  months  ended March 31, 1998
related to its sales  services,  including  cash out sales in  settlement of gas
imbalances,  decreased  $27 million to $133  million,  when compared to the same
period in 1997.  The decrease  was  primarily  due to a lower  average gas sales
price of $2.18 per dekatherm  (Dt) in the first quarter of 1998 versus $2.85 per
Dt in 1997.  However,  this  decrease  in  revenues  had no effect on  Transco's
operating  income or net income  variances when compared to the prior year since
the decrease in revenues was offset by a  corresponding  decrease in the cost of
sales.


                                                            Three Months
                                                          Ended March 31,
                                                     -------------------------
Gas Sales Volumes (TBtu)                                1998             1997
------------------------
                                                     --------         --------


Long-term sales                                          40.5             42.4
Short-term sales                                          9.0              2.8
                                                     --------         --------
     Total gas sales                                     49.5             45.2
                                                     ========         ========


STORAGE REVENUES

     Transco's  operating  revenues related to storage  services  increased $1.5
million to $38.1 million for the three months ended March 31, 1998 when compared
to the same period in 1997. However, this increase in revenues was substantially
offset by a $1.4  million  increase in  underground  storage  costs  included in
operation and maintenance expenses.

OTHER REVENUES

     Other  operating  revenues  increased  $2.8 million to $3.7 million for the
three months ended March 31, 1998 when compared to the same period in 1997,  due
to new services that began in July 1997 and increased liquids transportation.



<PAGE>


                         CAPITAL RESOURCES AND LIQUIDITY

METHOD OF FINANCING

     Transco  funds its  capital  requirements  with cash flows  from  operating
activities,  including  the  sale of trade  receivables,  by  accessing  capital
markets,  by repayments of funds advanced to Williams,  by borrowings  under the
Credit  Agreement  and  short-term  money  market  facilities  and, if required,
advances from Williams. At March 31, 1998, there were no outstanding  borrowings
under the Credit Agreement or short-term money market  facilities.  Advances due
Transco by Williams totaled $432 million.

     On January 16,  1998,  Transco  issued $200 million of notes that mature in
2005 and $100  million of notes that mature in 2008.  Proceeds  from these notes
were used for  general  corporate  purposes,  including  the  repayment  of $160
million borrowed under the Credit Agreement.

CAPITAL EXPENDITURES

     As shown in the table below,  Transco's capital  expenditures for the three
months ended March 31, 1998 were $49.8  million,  compared to $33.6  million for
the three months ended March 31, 1997.

<TABLE>
<CAPTION>

                                                                           Three Months

                                                                          Ended March 31,
                                                                       ----------------------

Capital Expenditures                                                    1998          1997
--------------------
                                                                       --------     --------
                                                                           (In Millions)
<S>                                                                    <C>           <C>
Market-area projects                                                   $   9.6       $   6.4
Supply-area projects                                                      25.5           3.3
Maintenance of existing facilities and other projects                     14.7          23.9
                                                                       -------      --------
      Total capital expenditures                                       $  49.8       $  33.6
                                                                       =======      ========

</TABLE>


      Transco's capital  expenditure budget for 1998 and future capital projects
are  discussed in its 1997 Annual Report on Form 10-K.  The following  describes
significant developments related to those projects and any new projects proposed
by Transco.

      INDEPENDENCE PIPELINE PROJECT In April 1998, Independence Pipeline Company
(Independence)  notified the FERC that it is revising  its  expected  in-service
date  from  November  1999  to  November  2000,  reflecting  the  status  of its
certificate  application  and the  anticipated  time  required to construct  the
pipeline project once it is authorized.  Independence also recently executed and
filed  with  the  FERC  a  precedent  agreement  with  a new  shipper  for  firm
transportation  service of up to 99,000 Dts of natural gas per day.  This brings
the level of capacity  subscribed on the  Independence  Pipeline to just over 68
percent.

      MARKETLINK  EXPANSION  PROJECT  In May  1998,  Transco  plans  to  file an
application with the FERC for approval of its MarketLink  Expansion Project with
a targeted in-service date of November 1, 2000.

      CUMBERLAND  PIPELINE PROJECT Cumberland Gas Pipeline Company  (Cumberland)
announced  that it is holding an open season from March 30 to May 29, 1998,  for
parties interested in subscribing to firm  transportation  capacity.  Cumberland
plans to file for FERC approval of the project during the third quarter of 1998.
The project is expected to be in service by the 2000-2001 winter heating season.

      LIGHTHOUSE   PIPELINE  PROJECT  In  April  1998,   Transco,   Duke  Energy
Corporation and Iroquois Gas Transmission System announced plans to form a joint
venture  to  develop a natural  gas  pipeline  to serve  markets in New York and
Connecticut. The pipeline, called the Lighthouse Pipeline, is designed to extend
under the Long  Island  Sound to  transport  U.S.  and  Canadian  natural gas to
southern  Connecticut.  The new  pipeline  system,  proposed  to have an initial
capacity of 350,000 Dts per day, will  primarily  supply natural gas to electric
generating  facilities  built  along  its  route  in  southern  Connecticut  and
facilitate  the  development  of  low-cost  power  generation  on  Long  Island.
Lighthouse Pipeline is targeted to be in service by 2000 to 2001.

OTHER CAPITAL REQUIREMENTS AND CONTINGENCIES

      Transco's capital requirements and contingencies are discussed in its 1997
Annual  Report on Form 10-K.  Other than as  described in Note 3 of the Notes to
Condensed Consolidated Financial Statements, there have been no new developments
from those described in Transco's 1997 Annual Report on Form 10-K with regard to
other capital requirements and contingencies.

CONCLUSION

      Although no assurances can be given,  Transco currently  believes that the
aggregate of cash flows from operating activities, supplemented, when necessary,
by repayments of funds advanced to Williams,  advances or capital  contributions
from Williams and  borrowings  under the Credit  Agreement or  short-term  money
market  facilities,  will provide Transco with sufficient  liquidity to meet its
capital requirements.  Transco also expects to access public and private markets
on reasonable terms to finance its capital requirements.



<PAGE>


                           PART II - OTHER INFORMATION


ITEM 1.      LEGAL PROCEEDINGS.

             See  discussion  in Note 3 of the Notes to  Condensed  Consolidated
             Financial Statements included herein.

ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K.

             (a)   Exhibits.

                   None.

             (b) Reports on Form 8-K.

                   None


<PAGE>





                                    SIGNATURE


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.




                                              TRANSCONTINENTAL GAS PIPE LINE
                                              CORPORATION (Registrant)




Dated:  May 15, 1998                          By /s/ James C. Bourne
                                              ----------------------
                                              James C. Bourne
                                              Controller
                                              (Principal Accounting Officer)











<PAGE>